The price of gold surged by 17 per cent in the first quarter of this year – its best performance in almost 30 years.

The quarterly report into the precious metal by the World Gold Council also found that gold was one of the best performing assets on the global market between January and March this year.

Demand for gold rose by 21 per cent on the same period last year to stand at 1,290 tonnes. This was the second biggest quarterly figure ever recorded. The figure was boosted by demand from central banks, which bought 109 tonnes during the period.

The World Gold Council credited the strong figures to a mixture of political and financial concerns around the world. It said the uncertainty created by negative interest rate policies put in place in the Eurozone and Japan helped increase the attraction of gold among investors for its safe haven properties.

The report said: “Gold found favour for its role as an effective risk diversifier, enhanced by its added benefits of liquidity and relatively low volatility.

“Inflows were reportedly from a broad investor base, from institutional to private. Notably, there is anecdotal evidence that many of these inflows are from investors initiating or rebuilding strategic, long-term holdings after the wash-out of positions since early 2013.”

The gold price has also been bolstered by the weakening expectation of further rapid interest rate rises in the US. At the end of last year, the market was expecting the cost of borrowing to be increased again early in 2016 but this did not materialise, and the US Federal Reserve has taken a much more cautious approach than anticipated.

The changes in the international economic picture at the start of 2016 created an uncertain position that has benefited the gold price.